From Homescape

With more than 4,000 new condominium units expected to be completed in metro areas like Atlanta and Phoenix this year, cities across the country are bracing for a flood of new supplies. Many of these new units are a result of developments that were created during the height of the housing boom and are now coming to a completion. According toThe Wall Street Journal, developers in Miami and Fort Lauderdale, FL, “are readying nearly 10,000 total new units in a market already struggling with canyons of unsold condos.” San Diego, another hard-hit region, will add 2,500 units, according to estimates provided by Reis Inc., a New York-based real estate-research firm.

Supply and no demand
The U.S. finished 2007 with a supply of condos large enough to absorb 10 months of demand, the highest level since the National Association of Realtors began the tally in 1999, the Journal reported.

While developers may not be thrilled by the overstock, condo buyers fishing the market may have a wider net to cast with significant price cuts on the newer units. This latest flood of inventory will come at a hefty cost for most lenders across the country. Lenders of all sizes have $42 billion of condominium debt on their books, according to Foresight Analytics. In just three months — between the third and fourth quarters of last year — the delinquency rate rose to 10 percent from 5.9 percent, according to the Oakland, CA, research firm.

While it may seem surprising that anyone would want to add supply to a market whose troubles have been well-publicized for several months now, the Journal reports that the economics of condo building encourage developers to bring half-finished projects to completion, even when prices and demand are plunging. Developers usually put up their own money for a project first, then spend borrowed funds. Once developers have spent their money and have commitments from lenders, they have a strong incentive to keep building to finish the project.

Going rental
Driving around Chicago, I’ve noticed some developers have turned their condos into rental units for the time being. They probably figure they could make more money selling the units after the inventory goes down and the housing market regains its footing. But going the rental route will only work if you’re smart about it.

When I was walking my dog this weekend, I noticed a condo down the street from me that had been on the market for over six months, now had a for rent sign posted outside. The condo was a for-sale-by-owner, and last time I checked, the owner had already reduced the price of the unit by $15,000 from the original asking price. But I guess the price cut failed to lure any buyers. The rental price for the 2-bed, 2-bath condo is $1,895 per month not including utilities. The average 2-bedroom, 1-bath apartment in my neighborhood is going for $1,200. I don’t know about you, but I’d rather share the single bathroom if it means saving me $700.

I’m sure the owner of the condo wants to earn enough money to pay for property taxes, condo assessments and possibly make some extra cash on the side, but his asking price in no way fits within the surrounding rental market. If you can afford $2,000 in rent a month in Chicago, you probably can afford to buy (or you’re renting a luxury high-rise apartment downtown that has a private doorman and gym). Know your market, do your homework and be realistic when you come up with your rental price, otherwise, it will just be another bad investment choice.

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.

We at Homescape decided to conduct a consumer survey to learn more about today’s online users and better understand how they use the Internet for their home buying and selling needs. We posted the survey on our homepage during the first two weeks of April and had 744 respondents; 535 of them answered all of the questions. Inspired by the survey’s successful response rate, we will continue to track the growing trends and improve our methods to help consumers with their home selling and buying needs.

Here are some of the survey highlights:

Background information
• 93.7% of respondents described themselves as consumers.
• 80% own a single family home.
• 61% currently own their own property (condo or raw land).
• 42% live in a small town or midsize city.
• 35.7% are first-time home buyers.
• 27% live in a suburb of a large city.

Demographics
• 58% of respondents are female.
• 42% are male.
• Age breakdown:
o 23% are 45-54 years old.
o 21% are 55-64 years old.
o 20% are 35-44 years old.
o 17% are 25-34 years old.
o 13% are 65 and older.
o 6% are 25 and younger.

Home buying and selling
• Why were online users looking for a new home?
o 29% said they were changing careers and relocating.
o 26% were tired of their current homes.
o 20% were downsizing.
o 17% were upgrading to accommodate a growing family.
o 5% were getting married.
o 3% were graduating college.

• Other key findings:
o 85% of respondents were considering working with an agent to assist them in their home search.
o 65% were using the services of a real estate agent to sell their current home.
o 47.6% were planning to buy a home within 6 months, while 28.3% said they wanted to buy within 1 to 3 months.

Internet usage
• How often in an average month did respondents visit a real estate or related Web site?
o 50.3% said they visited real estate sites 1-2 times a month.
o 29.3% visited real estate sites 5 or more times a month.
o 20.4% visited real estate sites 3-4 times a month.

• What did respondents want to do online?
o 77.7% said they were looking for homes for sale.
o 31.3% were looking for neighborhood information.
o 10.6% were looking for advice on home buying, selling and financing.

And the finding that made us all smile was:
86% of respondents said they would recommend Homescape.com to a friend or relative.

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.

For all of us still waiting to see the bottom fall out from the housing bust, the bad news keeps a coming. Home prices continue to fall in the country’s top 20 metro markets, according to the S&P Case/Shiller Home Price Index released on Tuesday. The index, which tracks 20 of the largest housing markets, showed prices plummeting by 12.7 percent in the 12 months ending February. That’s the biggest fall since the index began tracking prices eight years ago.

The hardest hit cities include the Las Vegas metro area, where prices plunged more than any other city, down 22.8 percent over the 12 months through February. Miami prices plummeted 21.7 percent. In Phoenix, they’ve dropped 20.8 percent.

Of the 20 cities tracked by the index, Charlotte, NC, was able to buck the nationwide trend and enjoyed a 1.5 percent price increase over the 12-month period.

Nevada, California and Arizona also lead the nation in foreclosure filings, according to a separate report release by RealtyTrac on Tuesday.

Foreclosures up
RealtyTrac reported that nationally, there were nearly 650,000 foreclosure filings —including notices of default, auction sales and bank repossessions — were issued in the first quarter of this year. That represents one of every 194 households and marks a 23 percent increase from the last quarter of 2007. Some economists speculate the number of foreclosures to mushroom even more as an expected $362 billion worth in adjustable rate mortgages (ARMs) are due to reset this year.

One-year change in home-price declines

Las Vegas: -22.8%
Miami: -21.7%
Phoenix: -20.8%
Los Angeles: -19.4%
San Diego: -19.2%
Tampa: -17.5%
San Francisco: -17.2%
Detroit: -16.5%
Washington: -13.0%
Minneapolis: -12.5%
Cleveland: -9.2%
Chicago: -8.5%
New York: -6.6%
Atlanta: -5.6%
Denver: -5.5%
Boston: -4.6%
Dallas: -4.1%
Seattle: -2.7%
Portland: -2.0%
Charlotte: 1.5%

Source: Standard & Poor’s and Fiserv; data through February 2008

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.

An Oscar-themed soiree with fancy cocktails and hors d’oeuvres, and an open house featuring a worldly selection of wine and cheeses are giving a whole new meaning to today’s dog-eat-dog home-selling market. I recently read an article in The Wall Street Journal on a growing trend among real estate professionals hosting swanky parties at listed properties to lure in prospective buyers. It’s another creative way Realtors are showcasing their clients’ homes.

Top chef
In my former life, I worked as an event planner and catering manager. I regularly worked with Realtors to cater open houses. Most of the homes I catered were in the multimillion dollar bracket, but I think this clever marketing idea can also benefit agents selling properties in the mid-to-lower-level price ranges.

A festive atmosphere during an open house helps energize a property. It creates a warm and welcoming ambience, and makes the home feel more livable. Each time I planned an event, I avoided tossing a bunch of appetizers on a plate and leaving them out on a table by the front door (which many Realtors tend to do). Instead, my goal was always to create a dinner or cocktail party similar to one the prospective buyers might throw if this were their own home.

Catering tips

Depending on your budget, it could be expensive to hire a wait staff to serve the food. If you can’t afford it, lay out the food yourself, but make sure it’s done tastefully and decoratively. Here are some simple catering tips for an open house:

Prepare easy finger foods. Cheese on crackers is always popular and not very costly. But try to avoid cheese from a can. If you decide to serve meat or fruit, I recommend skewering them, because they’re easier to carry when people are touring the home. Always cut sandwiches into easy–to-hold square pieces. And use miniature wontons or pie crust if you serve appetizers with fillings. They’re easy to eat and create less of a mess.

Add decorative garnishes on the serving platters. Instead of using an ordinary sauce bowl, I like carving out green or red bell peppers and filling them with dipping sauces. Place fresh flowers, sans stems, on the serving platters to add some lively colors.

Don’t use plastic plates, flatware and glasses. Go for the good China and silverware. You want to recreate the most realistic experience for the buyer. Plastic can send the message of cheap.

Serve food in the kitchen or dining room. Most people entertain their guests in these rooms, so serving food at the entrance of the home is not only an awkward place, but it doesn’t help showcase the room’s functionality.

Utilize the home’s oven or stove. Whether it’s a fresh batch of chocolate chip cookies or toasted garlic crackers, the aromas wafting from the oven can create a warm, inviting feeling for buyers as they pass through the kitchen.

Depending on the number of visitors expected to tour the home, most restaurants can cater an open house for 60 people for under $100. I’ve even seen Realtors on shoestring budgets make over Subway sandwiches to look like a five-star meal. It’s always good to send out invitations to your prospective clients so you can get an accurate head count. Adding some fun food and drink to an open house is definitely a tasteful marketing plan worth nibbling at.

Would a fancy party at a listed property help convince you to buy a home?

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.

While some housing markets across the country are being hit hard with rising foreclosure rates and excess home inventory —Stockton, CA, and Las Vegas to name a few — Manhattan seems to be sitting pretty in its New York City bubble.

The average Manhattan home soared 41 percent in a year to $1.6 million in the first three months of 2008, according to a report by ResidentialNYC.com, a Web site managed by The Real Estate Board of New York.

NYC high rollers
Compared to other New York boroughs, Manhattan’s recent price surge is the exception. An average apartment in the Upper West Side will ring you up $2,098,000. In Brooklyn, prices rose an average of only 3 percent, to $582,000. Average prices in Queens and Staten Island were both down by 5 percent, at $458,000 and $427,000 respectively. Average prices in the Bronx slipped by 1 percent to $396,000.

While the National Association of Realtor’s (NAR) housing report released this week found that the national median price of a home sold last month dropped to $200,700, a decline of 7.7 percent from the median price a year ago, investing in a home is still a profitable bet no matter where you live.

Betting on your home
According to NAR, the national median price of existing homes has increased an average of more than 6 percent every year over the past 30 years, with home values nearly doubling every 10 years.

A Federal Reserve study has shown the average homeowner’s net worth is 46 times the net worth of the average renter and the Department of Housing and Urban Development (HUD) found 60 percent of the average homeowner’s wealth is from their home’s equity.

No one said the aftermath of the housing storm was going to be pretty. But there are certain truths in life that remain constant: death, taxes and home-value appreciation.

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.